Bgs Case

This paper explores the controversial issues surrounding the travel industry and the subsequent consequences on society. We will examine and analyse three main issues based on the business, societal and governmental perspectives. After which, we will propose viable recommendations to narrow down the gap in which societal expectations and the business ones differ. The three ethical issues identified are (1) exaggerating actual number of tour bookings (2) misleading information (3) negligence regarding tour guides' practices.

Introduction

Industry overview

While the travel industry might seem homogeneous, there actually exist separate subcategories in the industry itself. For our project we have decided to focus on travel agencies that specialize in outward-bound tours.

It is not surprising that price competition is extremely intense in the local travel industry where there are more than 1000 travel agents , including tour operators. In order to stand out amidst the competition, agencies offer bargain prices to cater to the budget of the customers. In the process, unethical acts eventually surface as agencies vie to get the customers.

Among the agencies we have visited, we shortlisted 3 companies for our research: Universal Travel, Ik Chin Travel and M Asia Travel.

Universal Travel, an exotic tours specialist, has been in the travel industry since 1975. We interviewed the CEO, Mr Khoo, who is the brother of NATAS CEO, Mr Robert Khoo.

Ik Chin Travel has been in this business for more than 40 years, starting in 1967. We interviewed the CEO, Mr Kok. This tour agency tends to focus more on tours in the Asian region.

M Asia Travel is an agency which does a variety of tours to Taiwan and the Europe region. We interviewed one of the senior agents, Mr Alex Chua.

Our Approach

We brainstormed to analyse the possible ethical issues in the travel industry with respect to business, government and the society. We chose interviews as a way to source for information from the related companies.

We managed to interview NATAS' CEO, Mr Robert Khoo, who provided us with a broad knowledge of the current travel industry from both business and society's point of view. Through the interview, we managed to highlight several issues that we began to investigate.

Apart from the 3 companies that were listed above, we also managed to interview the Senior Vice President (PR & Marketing) of CTC Travel, Ms Alicia Seah and also the manager of Fortune Travel, Ms Gwen.

In order to provide a well-rounded analysis of the travel industry, we have decided to examine the various aspects of the travel industry.

For the first issue, we chose to focus on customer service - mainly the promotion of tour packages from agencies to tour applicants. Based on information we gathered from interviews, there have been occurrences of exaggeration in the actual number of tour bookings in Singapore.

The second issue emphasizes on the use of sweeping statements in the itinerary of tour packages that lead to customers signing up due to a false impression of the tour. This happens more to tours heading towards USA.

The last issue focuses on how agencies handle their relationship with the tour guides' questionable behavior in China.

Ethics

Ethics is an understanding of right and wrong conduct to dictate if our behavior is moral or immoral when dealing with human relationships .

Stakeholder Model

"Stakeholders" refer to people that are affected by or affects, corporation's decisions, policies and operations. In our research, the stakeholders identified are the customers, agencies, relevant associations and lastly, the Singapore government.

First Issue: Exaggerating actual number of tour bookings

Overview

During off-peak seasons , it is more difficult for smaller agencies to form tour groups. Therefore, agencies increase the likelihood of customer bookings by deliberately exaggerating the existing number of tour applicants. This gives customers' false confidence that tour groups would more likely to be formed.

However, this compromises on the customers' right to seek alternatives because they are likely to sign up with another agency that has more optimistic numbers. Thus the issue - is it unethical to intentionally exaggerate the number of tour applicants in order to convince customers to make a booking?

Business

Based on our interviews, all three agencies engage in such practices. They also claimed unanimously that this is a business strategy commonly adopted by players in the industry, especially during off-peak seasons when it is difficult to form tour groups. M Asia's senior agent explained this is a sales strategy ultilised to kick-start the tour group and give customers confidence in purchasing their products.

Ik Chin's CEO stated that this is very common yet inevitable as agencies do not wish to lose potential business opportunities by cancelling possible tour groups. Hence, using this strategy, agencies push for tour groups to form right up till the last minute, even if it leads to late cancellations and hence inconvenience for customers.

Universal travel's CEO states that this is a way to give customers assurance as customers usually only put their minds at ease about booking the tours knowing that several other customers have already signed up .

Government

Currently, there are no regulations enforced by law and Singapore Tourism Board(STB) that restrict the verbal exaggeration of group details. While such practices may be considered 'cheating' under S415 of the Penal Code , it is difficult for STB to conduct checks on travel agencies regarding the use of verbal exaggeration.

Society

Upon interviewing patrons of travel agencies, we found out that many customers feel that the exaggeration of facts provide inaccurate information that could mislead consumers to make wrong decisions, while others feel that this can be considered deceiving .

Our analysis is that this would be unfair to street-smart customers who take such information into consideration as one of the deciding factors when booking a tour will be subjected to potential